2025-12-30 20:26:01

The 2025 earnings report has just been released, and the overall account is maintaining growth. However, looking at the return rate alone is not enough to get a comprehensive understanding—if you really want to understand how your investment performance stacks up, you need to compare it against risk. Can someone explain the specific calculation method of the Sharpe Ratio? I just want to understand how my returns outperform market fluctuations. This metric is especially useful for evaluating the true profitability of trading strategies, including measuring the alignment of drawdown risk and returns.

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SocialAnxietyStaker

· 8h ago

The Sharpe ratio sounds sophisticated, but basically it just shows whether your earnings are worth the volatility... Calculating this for my account always gives me a headache.

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AllTalkLongTrader

· 8h ago

The Sharpe ratio, to put it simply, is about whether your earnings are enough to compensate for the risk. The calculation isn't that complicated. I think instead of obsessing over these metrics, it's better to see if you've truly outperformed the benchmark. Don't deceive yourself. Having a beautiful return rate is useless if the drawdown exposes the true situation. That's the real test. That said, continuous growth is indeed good, but if you can preserve your principal in the 2025 market conditions, you'd be very fortunate. To calculate the Sharpe ratio, there are actually three steps: excess return divided by volatility, then interpret it yourself.

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GateUser-3824aa38

· 9h ago

The Sharpe Ratio, to put it simply, is about how your returns are, right? If the risk is too high and the returns are just average, that's a big loss. I've been thinking about this recently, and I feel most people just focus on the return rate, but they don't realize that drawdown is the real killer.

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BearMarketMonk

· 9h ago

The Sharpe Ratio, in simple terms, is asking—are the profits you make worth the heart-pounding risk? Most people get excited about the return rate, not realizing that it might have come at the cost of stepping on numerous landmines. History repeats itself, showing us that high returns often hide high-risk traps, and in the end, it might just be survivor bias at play.

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